Fed Funds Before CPI

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CPI will be an important event tomorrow an hour before open. I believe the most important thing will be the reaction of the fed fund futures. Currently the target rate is sitting at 4.64 and the market is pricing in an 86% chance of that rate moving down to between 4.25-4.50.

As long as this expectation remains, I think we'll have a bullish to flat end to the week. Downside would come if rate cut expectations changed due to an unexpected report. That would be a major shift right before the fed meeting so that seems unlikely, but it will be important to watch.

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